What Happens to Your Apple Employee Benefits When You Leave?
You've spent years building your career at Apple. You've accumulated RSUs, invested in your 401(k), and watched your retirement fund grow. Now you're considering your next move.
Here's the million-dollar question: What happens to all those benefits you've earned? The answer isn't simple, and getting it wrong could cost you thousands of dollars. Let's break down exactly what happens to each of your Apple benefits when you leave so you can make informed decisions and keep every dollar you've earned.
Your Apple 401(k)
Your Apple 401(k) is one benefit you don't need to worry about losing. Any funds in your 401(k) are 100% vested from day one. That means every dollar is yours to keep, including the employer match that Apple has added to your account. This applies regardless of how long you’ve been at the company. Whether you've been there six months or six years, the full balance in your 401(k) can go with you when you walk out the door.
Your Options After Leaving
When you leave Apple, you have four choices for your 401(k).
Leave it with Apple: If your vested balance exceeds $7,000, you can keep your money in Apple's 401(k) plan. You won't be able to make new contributions, and you won't receive any additional matching, but your existing balance can continue growing tax-deferred.
Roll it into your new employer's plan: If you move to a new employer who offers a 401(k), you can roll your Apple 401(k) directly into the new plan. This keeps everything in one place and may simplify your retirement planning.
Roll it into an IRA: Many people choose to roll their 401(k) into a traditional IRA. This option often provides more investment choices and potentially lower fees than employer-sponsored plans.
Cash it out: This is almost always the worst option. The taxes on a large withdrawal will reduce your income significantly, and your investments will not grow in your account. If you’re under 59½ (or 55 via the rule of 55), you will also be charged a 10% early withdrawal penalty.
Restricted Stock Units (RSUs)
Your Apple RSUs are where the stakes get high. These represent a significant portion of your total compensation, and the rules around what you keep are strict.
What Happens to Vested RSUs
Any RSUs that have already vested before your last day of employment are yours to keep. Apple typically vests RSUs twice a year, with the standard grant following a four-year schedule where 12.5% vests every six months.
Once RSUs vest, they're converted to actual Apple shares in your brokerage account. You own them outright and can hold them or sell them as you choose. Just remember that when RSUs vest, they're taxed as ordinary income. Apple withholds 22% for federal taxes (37% for amounts over $1 million). However, your actual tax liability may be higher, depending on your bracket.
What Happens to Unvested RSUs
When you leave Apple, any unvested RSUs are typically forfeited. If you have a large unvested RSU grant and your next vesting date is just weeks away, the timing of your departure matters. Leaving too early could mean forfeiting tens of thousands of dollars worth of stock.
There are potential exceptions when retiring. If you're leaving due to retirement and it's been at least one year since your RSU award date, your unvested RSUs may continue to vest on a pro-rata basis even after you leave. However, "retirement" is specifically defined in Apple's plan documents, so you'll need to verify whether your departure qualifies.
Stock Options
While Apple primarily uses RSUs for equity compensation, some employees may have stock options. If you have vested stock options, you typically have 90 days from your last day of employment to exercise them. After 90 days, your options expire, and you lose them permanently.
However, exercising stock options requires cash. You'll need to pay the strike price for each share you want to purchase, plus any applicable taxes. For example, if you have 1,000 options with a $50 strike price, you'll need $50,000 just to exercise them, even if Apple's current stock price is $180 per share.
A fiduciary financial advisor can help you determine which options to exercise and whether the tax implications make sense for your situation. The decision needs to happen quickly because that 90-day window arrives faster than you think.
Employee Stock Purchase Plan (ESPP)
Your participation in Apple's ESPP ends when you leave the company. If you're in the middle of an ESPP offering period when you leave, your accumulated contributions will be refunded to you. They will not be used to purchase more shares at the end of the offering period.
However, any shares you've already purchased through the ESPP are yours to keep. You can hold them or sell them, depending on which makes most sense for you.
Tax Treatment
The tax treatment for your ESPP shares depends on how long you hold them.
If you hold the stock for at least one year from purchase AND two years from the offering date, this will be a qualifying disposition. This gives you more favorable tax treatment with a larger portion of your gain taxed at long-term capital gains rates instead of ordinary income rates.
If you sell your stock before it reaches the time limit for a qualifying disposition, you'll pay ordinary income tax on the 15% discount, plus short-term or long-term capital gains tax on any additional appreciation. This is called a disqualifying disposition.
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Health Insurance
Your Apple health insurance coverage typically ends on your last day of employment or at the end of the month in which you leave. Under federal COBRA law, you have the right to continue your health coverage for up to 18 months after leaving. The catch is that you'll pay the full premium yourself: both the portion you paid as an employee and the portion Apple paid on your behalf, plus up to a 2% administrative fee.
Is COBRA Worth It?
COBRA can be expensive. If Apple was paying $800/month for your family coverage and you were paying $200, your COBRA premium could be around $1,020/month. However, COBRA might make sense if:
You only need coverage for a few months
You have ongoing medical treatment with your current providers
You're close to meeting your annual deductible or out-of-pocket maximum
Marketplace plans in your area don't cover your doctors or medications
Your Enrollment Window
You have 60 days from the date you lose coverage to elect COBRA. If you do elect it, your coverage is retroactive to your last day of employment, meaning you won't have a gap in coverage even if you wait to enroll.
Health Savings Account (HSA)
If you've been contributing to an HSA through Apple's high-deductible health plan, your HSA will stay with you when you leave. After you leave Apple, you can:
Continue using your HSA funds for qualified medical expenses
Roll the account into a new HSA at another employer
Let the money grow tax-free and use it in retirement (after age 65, you can even withdraw HSA funds for non-medical expenses without a penalty)
Keep the same HSA provider or transfer to a different one
An HSA can be a powerful tool for managing healthcare costs in retirement. This is not a benefit to overlook when leaving Apple.
Deferred Compensation Plan (If Eligible)
Apple's Deferred Compensation Plan is only available to select executives and highly compensated employees. If you participate in the DCP, your departure triggers specific distribution rules based on your election.
Deferred compensation is typically paid out according to the schedule you elected when you deferred the income, often in a lump sum or installments beginning six months after separation from service. Review your DCP agreement carefully and consult with your financial advisor, as the timing of your distribution could impact your tax situation significantly.
Important Steps to Take Before Your Last Day at Apple
To make sure you don’t leave any money on the table, here's your pre-departure checklist.
Review your RSU vesting schedule. If you're close to a vesting date, consider delaying your departure. Waiting a few more weeks or months could be worth tens of thousands in equity.
Understand your stock option position. If you have vested options, determine the cost to exercise them and whether it makes financial sense. You'll only have 90 days after leaving to make this decision.
Check your final ESPP period. If you’re in the middle of an ESPP offering period, any money you’ve set aside will be refunded to you. If you want to purchase more shares at the discounted price, you will have to wait until the end of the current six-month period.
Verify your 401(k) balance. Confirm your total vested balance and decide what you want to do with it. You may leave it in the Apple 401(k) or roll it into another plan. Withdrawing the full amount is virtually never the right choice.
Review COBRA costs. Get the exact premium amounts for COBRA coverage so you can compare with marketplace plans or coverage from a new employer.
Download important documents. Save copies of your RSU grant agreements, ESPP records, 401(k) statements, and any other benefits documentation. You may lose access to Apple's internal systems after you leave.
Schedule an exit interview with HR. Get written confirmation of your last day of coverage for health insurance, final vesting dates for RSUs, and any other time-sensitive benefits information.
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Let Us Help You Maximize Your Apple Benefits
Your Apple benefits represent a substantial portion of your compensation at Apple, potentially adding up to hundreds of thousands or even millions of dollars. Even a minor mistake could cost you big. Fortunately, you don't have to figure it out on your own.
At TrueWealth Financial Partners, we specialize in helping you make the most of your equity compensation and benefits when transitioning into retirement. We can help you:
Time your departure to maximize your benefits
Plan a distribution strategy that minimizes taxes so you can keep more of your savings
Compare your health insurance options to find the best coverage at the best price
Ensure you will have enough to support the lifestyle you want for decades to come
You’ve spent your career building substantial wealth. Let's make sure you keep every dollar you've earned.
Schedule a free consultation with the TrueWealth team, and we can get started today.
FAQs
What happens to my paid time off (PTO) when I leave Apple?
Apple's policy on unused PTO varies by state. In some states, like California, Apple must pay out all accrued vacation time when you leave. In other states, they don’t. Check with HR about your accrued PTO balance and payout eligibility before your last day.
If I'm rehired by Apple, will my old RSUs come back?
No. Once RSUs are forfeited because you left Apple, they don't come back if you're rehired. However, you may receive a new RSU grant as part of your rehire offer.
Does leaving Apple affect my ability to sell RSUs I already own?
No, but you should be aware of trading windows. If you had access to non-public information in your role, you may be subject to blackout periods even after leaving. Check Apple's insider trading policy and consult with the legal or compliance team if you had access to material non-public information.
Will I still receive dividends on my Apple stock after I leave?
Yes, if you own Apple shares (from vested RSUs or ESPP purchases), you'll continue to receive any dividends Apple pays, regardless of your employment status. Dividends are paid to all shareholders.
What happens to my Mega Backdoor Roth contributions when I leave Apple?
Any after-tax 401(k) contributions you've already made and converted to Roth are yours to keep. However, you can't make new after-tax contributions to Apple's 401(k) after you leave. If you have unconverted after-tax contributions when you leave, roll them to a Roth IRA to avoid future tax complications.
Can I use the rule of 55 to access my Apple 401(k) penalty-free?
Yes, if you leave Apple in the year you turn 55 or later, you can withdraw from your Apple 401(k) without the 10% early withdrawal penalty. However, you'll still owe ordinary income tax on withdrawals.
How does leaving Apple affect my ability to do future Roth conversions?
Leaving Apple doesn't affect your ability to do Roth conversions from traditional IRAs or rollover 401(k)s. In fact, if you have a gap year between jobs or retire early with a lower income, it may create an ideal opportunity for Roth conversions at lower tax rates.
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